South Africa Bans Long Contracts and SIM Locking of Handsets

South Africa's telecoms regulator, ICASA has issued a series of regulations which will impact on the phone operators ability to sign lengthy contracts in exchange for handset subsidies. The proposals are based on public discussions held earlier this year.

The core proposals will limit contract terms to either six, twelve or eighteen months - and never to exceed two years, which presumably limits the ability of operators to extend a contract during its lifetime in exchange for a new handset or service.

Operators will also be barred from automatically "renewing" the contract and will need the customer to sign a new contract when their current one expires. That could however lock customers into a series of long contracts rather than simply carrying on their existing service on a month-by-month basis once the initial term expired.

Additionally, the regulator is requiring that contracts terms and conditions are made clearer and that the contracts state clearly the contract term and any early-termination fees. Operators will also be required to send at least three messages to customers advising them that their contract is nearing its termination period.

The regulator has also banned SIM locking of handsets.

Finally, the contract must state the actual cost of the mobile phone being provided and the value of the subsidy being offered.

Posted to the site on 20th June 2008